How NOT to Think About Game Theory

“Insensibly one begins to twist facts to suit theories, instead of theories to suit facts”

Sherlock Holmes,A Scandal in Bohemia

 

 

In an article he has written for Symposium magazine, Ariel Procaccia advices on how to understand game theory. However, the assertion he provided on how and when game theory is useful has some flaws, but the most important one which is the root of all can be summarized by the Sherlock Holmes quote above.

 

“So it would seem that game theory has saved the world from thermonuclear war. But does one really need to be a game theorist to come up with these insights?[…]But the type of strategic reasoning underlying Cold War policy does not directly leverage deep mathematics — it is just common sense.”

 

Dr. Procaccia asserts that game theory –by the virtue of studying strategic interactions between rational players of any kind and form—is there to provide “wisdom” and “reason” to decision makers. On the contrary, game theory is the study of understanding the “wisdom” and “reason” adopted by the so-called players of the game.  To answer his question, one does not need to be game theorist to come up with these insights, but one has to be game theorist to understand under what conditions one comes up with these insights.

 

In what kind of information environment is the game being played? What are the actions available to players? What are the payoffs related to those actions, given all the other players’ actions? Are there any uncertainty regarding the type of players? or Are there any uncertainty regarding the payoff structure as global games will suggest?  Those are the questions asked and answered by the game theorist upon observing a strategic interaction either in Cold War or in a Jane Austen novel.

 

This simplified understanding of game theory continues when the article cites Ariel Rubinstein’s definition of game theory as  “collection of fables and proverbs” . Game theory is indeed collection of fables and proverbs, which are merely generalization of real-life situations.  However, this does not belittle the explanatory power of game theory in political science, definitely not in the International Relations and/or Comparative Politics of parliamentary democracy. The fable “The Tortoise and the Hare” is not there to teach the children about the relative speed of both animals, but the relative wit of them. Game theory is not there to help social scientist to explain single events with a specific context but to help them have structural foundations of observed phenomenon.

 

I think students who are taking online game theory courses with the understanding provided by the article will be in there for disappointment, as will their professors.

 

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